Bank conveyancing panel conditions re Manorial Rights Indemnity Insurance
Skipton and Godiva Mortgages, like most mortgage companies, dictate their own specific instructions when it comes to manorial rights indemnity insurance. This page is designed to help conveyancing firms on the various mortgage company conveyancing panel where the title for the the property to be mortgaged contains manorial rights. Lawyers are advised to familiarise themselves with the CML handbook requirements for each bank, be it Lloyds TSB, Natwest or Birmingham Midshires. The information on this page Is not to be read as manorial rights indemnity insurance advice.
Need help with manorial rights indemnity insurance from your lender?
Yorkshire Building Society and Accord as with most mortgage companies, obligations require that where manorial rights indemnity insurance is to be put on risk:
- the manorial rights indemnity insurance policy must be for the benefit of the mortgage company and, if possible, for the benefit of the borrower and any next owner or lender. If the mortgagor will not be protected by the manorial rights indemnity insurance policy, the mortgagor must be advised accordingly.
- your practice is duty bound to spell out to the borrower that the borrower must comply with any conditions of the manorial rights indemnity insurance policy and that the mortgagor should notify the bank of any notice or potential claim in respect of the policy
- you are responsible for approving the terms of the manorial rights policy on behalf of the bank
- the limit of indemnity must meet the requirements for the lender (see UK Finance Lenders’ Handbook Part 2 )
- the manorial rights indemnity insurance policy should be effected without expense to the mortgage company
- the manorial rights indemnity insurance policy must not contain conditions that you recognise would invalidate or prejudice the interests of the bank
- your practice is required to reveal to the insurer all relevant information which you have acquired
- your firm must send a duplicate of the manorial rights indemnity insurance to the mortgagor and explain to the borrower why the manorial rights indemnity insurance policy was effected and that a further policy might be mandatory if there is supplemental borrowing against the mortgaged property
| Lender | Requirement |
|---|---|
| Allied Irish Bank | At least the amount of the mortgage advance. |
| Barnsley Building Society | An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
| Britannia | Cover to the full value of the property. |
| Danske Bank | The limit of indemnity insurance should be the purchase price or valuation - whichever is higher |
| Ecology Building Society | An amount equal to at least 110% of the mortgage advance |
| First Direct | The value of the insurance must be for at least the full value of the property |
| Fleet Mortgages | An amount at least equal to the valuation of the property. |
| Furness Building Society | Property valuation or purchase price, whichever the greater. |
| Lloyds | The value of the property. |
| M&S Bank | the value of the insurance must be for at least the full value of the property |
| Mortgage Agency Services | 110% of the purchase price or valuation, whichever is greater |
| National Counties Building Society | An amount at least equal to the mortgage advance. |
| Paragon Residential | An amount at least equal to the stated value of the Property. |
| Parity Trust | An amount equal to at least 110% of the mortgage advance |
| Pepper Money | An amount equal to at least 110% of the purchase price or value, whichever is higher. Any indemnity insurance policy must be for our benefit, that of any transferee/assignee (legal or equitable) of the mortgage and also the borrower(s). |
| Sainsbury's Bank | An amount equal to the higher of the value of the property or the purchase price. |
| Tandem Bank | An amount at least equal to 110% of the purchase price or valuation – whichever is the greater. |
| RBS - Direct Line One | An amount equal to the value of the property. |
| RBS (One Account) | An amount equal to the value of the property. |
Manorial Rights Contingency Insurance : Reflections
The extent of the terms for manorial rights indemnity insurance are explained in the policy paperwork. Conveyancing Practitioners are obliged to direct the borrower to the manorial rights indemnity insurance policy paperwork. The intention of manorial rights indemnity insurance is to provide indemnity in respect of the risks specified in the policy schedule - so it’s important to check any draft to ensure it is in order. The continuance of this non-investment insurance contract is in perpetuity unless otherwise stated in the manorial rights indemnity insurance policy. It is well worth checking that the time frame is correct.Significant aspects and benefits of manorial rights Contingency insurance :
This policy would usually provide protection from financial loss that might arise in the event of a third party making a cliam in respect of the risks identified in the policy document. Manorial Rights indemnity insurance Cover normally includes- All ancillary costs and expenses incurred by the Insured with the written consent of the relevant insurer
- The cost of works (including professional fees) for the purpose of the development started, prior to proceedings for the enforcement of the risks specified in the manorial rights indemnity insurance, to the extent that such costs are rendered abortive by court order.
- The out of pocket expenses of altering or taking down all, or part of the development and the reinstatement of the land, insofar as such alteration, demolition or re-instatement is made necessary by court order.
- All sums paid with consent in writing from the insurance company to liberate the land from the risks specified in the manorial rights indemnity insurance.
- Market value reduction due to the successful enforcement of the risks specified in the manorial rights insurance.
- Liability for damages or compensation incurred in any action in respect of the risks specified in the manorial rights insurance, including incurred costs and expenses.
Due diligence should extend to checking that the answers on the application form are accurate. However remote the likelihood of a claim on the bank insurance policy might be you can rest assured that the insurer will check the details on any proposal form thoroughly before any claim is met.
Manorial Rights Indemnity Insurance has limitations - Other considerations
There may be consequences arising from the enforcement of the risks identified in the manorial rights indemnity insurance which are not adequately covered by financial compensation. Information provided on this webpage is for general information for conveyancers and solicitors in England and Wales on the the mortgage company conveyancing panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the mortgage company indemnity insurance. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.
An important exclusion applying to most manorial rights Policies is if you make any contact with any party who might cause a claim under the Policy, it can invalidate the cover.
The above information is in relation to properties in England and Wales.